ZBRA vs. HON: Which Industrial Automation Stock is a Better Pick?

Anindya Barman October 28, 2026

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Key Takeaways

Zebra Technologies expects 14-16% revenue growth in 2026, supported by demand and strategic acquisitions.
Honeywell raised its 2026 outlook as building and process automation drive growth across its three segments.
ZBRA has lower leverage and a 2.81 forward price-to-sales ratio, compared with HON's 3.36.

Zebra Technologies Corporation (ZBRA - Free Report) and Honeywell International Inc. (HON - Free Report) are prominent players in the industrial automation space. Zebra Technologies specializes in barcode scanners, RFID (radio frequency identification) and mobile computing, while Honeywell offers industrial automation technologies, sensing solutions and advanced process technology solutions. Their overlapping markets make this a relevant stock comparison for investors evaluating automation and productivity trends.

Let’s dive deep and compare the fundamentals of these two stocks to determine which one is a better investment option now.

The Case for ZBRA

Zebra Technologies is witnessing growth across the healthcare, manufacturing and retail & e-commerce end markets. Higher sales of mobile computing solutions are driving the company’s Connected Frontline segment. Revenues from the segment increased 25.9% (up 7.5% organically) year over year in the second quarter of 2026.

Solid demand for printing solutions, machine vision, data capture and RFID products is boosting the Asset Visibility & Automation segment’s performance. In the second quarter of 2026, the segment’s sales increased 13.5% (up 11.4% on an organic basis) on a year-over-year basis.

ZBRA has been advancing digital capabilities, optimizing the supply chain, expanding its data analytics capability and focusing on marketing activities to better engage with customers. Driven by these initiatives and solid demand for its products, the company expects third-quarter 2026 net sales to increase in the band of 17-20% from the prior-year level. The company expects its 2026 revenues to grow 14-16% from the year-ago level.

Zebra Technologies has steadily strengthened its business through acquisitions. In the second quarter, acquisitions and dispositions contributed 8.7 percentage points to total sales growth. In September 2025, Zebra Technologies completed the acquisition of Elo Touch Solutions, Inc. (Elo). The inclusion of Elo’s expertise in consumer-facing workflow, augmented by its suite of kiosks, edge computing, payment and touchscreen solutions, expands its addressable market by about $8 billion. The transaction expanded Zebra Technologies' reach across retail, healthcare, industrial and hospitality markets. In the second quarter, Elo delivered growth above management’s expectations, while joint selling efforts expanded the commercial pipeline and generated early customer wins.

In February 2025, Zebra Technologies acquired Photoneo, a market leader in the 3D machine vision solutions industry. The buyout enabled the company to combine Photoneo’s 3D machine vision solutions with its advanced sensors, vendor-agnostic software and artificial intelligence (AI)-based image processing capabilities. This acquisition enhanced Zebra Technologies' portfolio of 3D machine vision solutions and addresses several challenges in high-value applications.

ZBRA generated $361 million of free cash flow in the first six months of 2026, up 25.3% year over year. The company now expects full-year 2026 free cash flow of at least $1 billion, up from its prior expectation of at least $900 million. This cash generation supports continued investment, debt flexibility and shareholder returns.

Zebra Technologies has continued rewarding its shareholders. The company repurchased shares worth $568 million in the first six months of 2026. In February 2026, the company’s board of directors approved an additional share repurchase authorization of up to $1 billion. ZBRA expects to repurchase another $150 million of shares in the second half of 2026, bringing total full-year buybacks to roughly $700 million.

The Case for HON

Following the separation of Honeywell Aerospace on June 29, 2026, the company operates as a pure-play automation business. This marked the completion of Honeywell’s multi-year portfolio restructuring, allowing it to sharpen its focus on industrial automation and benefit from improved operational focus, capital allocation and financial flexibility.

HON is seeing strength across its three segments, aided by sustained demand in key end markets. Industrial Automation segment continues to benefit from favorable utilities project timing and solid momentum in sensing and industrial measurement, with organic revenues rising 4% year over year in the third quarter. Organic sales growth was driven by strength in industrial measurement and utilities businesses. While organic sales from the solutions business increased 16%, the same from the products business remained flat, as double-digit growth in sensing was offset by industry-wide meter deployment deferrals in utilities.

Strong demand for HON’s products and solutions, supported by rising building activity across the Americas, India and the Middle East, is also likely to benefit the Building Automation segment. Higher order rates and increased capital investments in data centers and hospitality are supporting growth. In the third quarter, the segment’s organic revenues increased 8% year over year. The upside was driven by continued strength in both the building products and building solutions businesses.

Continued strength in liquefied natural gas (LNG) and petrochemical projects, along with higher aftermarket refining demand is driving Process Automation and Technology segment’s revenues that increased 16% to $1.86 billion in the third quarter. Organic sales grew 8% year over year, with organic sales from the projects business increasing 14%, driven by strong backlog conversion.

At the end of the third quarter, HON had a total backlog of nearly $19 billion, up 7% year over year. For 2026, Honeywell raised its organic sales growth, adjusted earnings and free cash flow outlook. The company expects sales to be in the range of $20-$20.1 billion compared with the previous projection of $19.8-$20 billion. The higher sales forecast reflects continued strength across all three business segments, supported by strong demand in building products, industrial measurement and process automation projects.

Organic sales are now expected to increase 4-5%, up from the prior projection of 3-4%. HON expects a segment margin of approximately 20.5%, at the higher end of the previous projection of 20.1-20.5%. The metric indicates an increase of approximately 290 basis points year over year.

HON had cash and cash equivalents of $5.69 billion at the end of the third quarter. It generated $932 million in cash from continuing operating activities in the first nine months of 2026. HON’s free cash flow increased 15% year over year to $688 million in the third quarter, with free cash flow conversion of 95%. The company now expects free cash flow of roughly $2.1 billion for the full year, up from the previous projection of $2 billion.

Honeywell’s commitment to rewarding its shareholders through dividends and share buybacks is encouraging. In the first six months of 2026, Honeywell paid dividends of $1.82 billion and repurchased shares worth $1 billion. HON offers a dividend yield of 3.3% at the current stock price.